The dollar moved in a narrow range almost under ¥109.50 in Tokyo trading Tuesday, amid a dearth of fresh incentives.

At 5 p.m., the dollar stood at ¥109.52, up from ¥109.42 at the same time Monday. The euro was at $1.2172, up from $1.2166, and at ¥133.31, up from ¥133.13.

After trading below ¥109.30 in the early morning, the dollar rose to around ¥109.40 on buying by real demand-backed players.

But the greenback pared some of the gains later in the morning, pressured by the 225-issue Nikkei average’s fall into negative terrain and sluggish movements of long-term U.S. Treasury bond yields in off-hours trading.

The U.S. currency became static in the afternoon as investors took to the sidelines to see movements of long-term U.S. interest rates after a Treasury bond auction later on Tuesday.

A wait-and-see mood grew also ahead of the release of the U.S. consumer price index for May on Thursday and the U.S. Federal Reserve’s Federal Open Market Committee meeting next week.

Market players are likely to remain inactive until the CPI release, traders said.

If growth in the CPI exceeds market projections of slightly below 5%, speculation about the Fed starting debates on scaling back its quantitative easing will increase, helping the dollar rise against the yen, an official at a Japanese think tank said.

But if the CPI growth does not reach the estimated levels, expectations for the Fed keeping the easing regime in place for an extended period will grow, the official said, adding that selling pressure for the dollar will mount in such event.

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